Virtual Payment (POS) Terminals Market: The March towards a 'Cashless Future'

With the recent trend of going 'cashless', there has been a subsequent rise in the adoption cashless digitalized payment systems. Small businesses, in particular, will serve as a vital growth platform for virtual (POS) payment terminals. This is mainly because they refrain from investing in complex hardware and systems, making virtual terminals an indispensable resource for accepting online payments. Virtual terminals have gained their very own eminence with advancements in mobile applications, and the mounting need to enhance merchant and consumer interactions. Businesses are focusing on adapting to the new digital consumer behavior by replacing traditional payment systems with virtual payment (POS) terminals.

However, with intensified competition in global markets, companies are facing challenges in terms of meeting the rising customer needs for safety and security in processing transactions. Manufacturers have used this restraint to their benefit by integrating data encryption or tokenization into their virtual payment platforms, thereby enhancing security in payment processes. These strides towards a cashless future have compelled TMR analysts to conduct an in-depth analysis of the virtual payment (POS) terminals market. In its new study, TMR highlights the key drivers and changes in consumer behavior that are unlocking growth opportunities in the industry.

virtual payment pos terminals market winning imperatives

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Walk through the Market’s Evolutionary Timeline

The payments industry is a complex space that has been seeing spinning transition, with numerous companies offering advanced payment options to climb up the digital space. Electronic payment terminals existed long before the Internet era, with retailers increasingly adopting solutions from hardware manufacturers such as Ingencio and Hypercom. The landscape of terminal payments completely transformed with the emergence of the internet, as it led to the inundation of new online POS terminals. This technology has seen tremendous evolution from the launch of TWINPOS G Series in 2011 to the development of TWINPOS G5100Li POS models in 2018.

With a ballooning e-Commerce industry and the emergence of multiple payment gateways, the virtual payment (POS) terminals market is anticipated to grow at a promising CAGR of ~ 28%, and reach the mark of ~ US$ 78 Bn by the end of the forecast period.   

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Key Trends that are Worth Paying Attention To

Digital Wallets to Remain at the Forefront

Not only do digital payment systems offer a speedy shopping experience, but they instill a sense of security among consumers by eliminating the need to enter credit or debit card details over and over again. Moreover, digital wallet companies are increasingly providing digital wallet solutions that are easy to integrate. The e-Commerce sector, in particular, has proven to be the focal point for the growth of digital wallet solutions. Reduction in shopping cart abandonment due to cumbersome purchasing procedures is another reason for the growing consumer inclination towards digital wallets.

Expansion of Contactless Payment Terminals

With an increase in the number of services offered on mobile devices, there has been a rise in the adoption of Near Field Communication (NFC) services. This service allows the exchange of data between two mobile devices placed within a few centimeters of each other. Numerous retailers such as Macys, Walgreens, and Target have NFC-based payment terminals in place. When an NFC-integrated smartphone is held near this terminal, it automatically deducts the purchase amount from the card tied to the phone. This technology also offers additional security, as it uses a one-time code instead of the credit or debit card number. In lieu of recent credit and debit card breaches, the future of NFC solutions is expected to shine bright.

virtual payment pos terminals market

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Winning Imperatives to Circumvent Growth in the Market

Offering Loyalty Rewards to Enhance Customer Retention

Merchants are tying loyalty to the use of mobile wallets to drive consumer attention. Loyalty rewards have become the new currency in the space of virtual payment. Rising consumer interest in mobile payments is directly proportional to the value received from using these wallets. In a bid to retain customers, mobile wallet companies such as Google Pay and Amazon are offering loyalty rewards in the form of 'free stuff' and 'discounts' to attract new customers and retain the existing ones.

Bolstering Investments in Developing Regions and Untapped Markets

With the rise in digitalization, numerous countries in Asia and South America highly demand virtual payment terminals across end-use sectors. The extensive use of online shopping platforms and advancements in digital systems are key factors driving the use of virtual payment (POS) terminals in developing regions. Moreover, countries such as India and China are shifting towards a robust digital economy, as cashless payment systems take center stage. Asia Pacific alone accounted for ~ 27% of the virtual payment (POS) terminals market share in 2018, and is expected to reach ~ 48% by 2027. South America remains an untapped market, presenting a significant market space for growth, as the competition is low in this region.

A Glance at the Competitive Landscape

The virtual payment (POS) terminals market features a highly fragmented vendor landscape, with a large number of players competing to develop advanced virtual payment (POS) terminals. Competitive rivalry among players is mainly characterized by new alliances and partnerships to enhance their stronghold in the global virtual payment (POS) terminals market.

Apart from this, new product launches and business expansion are the key winning strategies deployed by players in the virtual payment (POS) terminals market. For example, in April 2018, Samsung Electronics America Inc., a subsidiary of Samsung Electronics, announced its plan to relocate its North Texas campus to Legacy Central in Plano, Texas, U.S. Further, in March 2019, PAX Technology partnered with Secure TablePay to introduce a new facility - Pay-at-the-Table Experience - to restaurants across the U.S.

Leading players in the virtual payment (POS) terminals market include

  • PAX Technology
  • Ingenico Group
  • Shenzhen Xinguodu Technology Company Ltd.

These players have a strong global presence, as they have invested significantly in expanding their virtual payment terminal manufacturing services. Prominent players such as VeriFone Systems Inc. and Fujian Newland Payment Technology Co., Ltd. also have a global presence. However, their market penetration is comparatively lower than the leading players in the virtual payment (POS) terminals market.

Emerging companies in the virtual payment (POS) terminals market include Panasonic Corporation, NCR Corporation, and Squirrel Systems. These companies are strengthening their presence by establishing new facilities and investing heavily in research and development activities to develop advanced software. For instance, in May 2018, Panasonic Corporation launched integrated mobile POS solutions for the Toughpad FZ-G1 rugged tablet and handheld devices for retail and hospitality industries.

virtual payment pos terminals market segmentation

Analysts’ Viewpoint of the Virtual Payment (POS) Terminals Market

TMR analysts opine that, the virtual payment (POS) terminals market will show promising growth during the forecast period, due to the high adoption rate of cashless payment systems. The retail industry is expected to present high growth opportunities for the market’s growth, as retail businesses want to provide their customers with a smooth purchase experience. Developing countries such as India and China are expected to be lucrative for the growth of the virtual payment (POS) terminals market because of a rise in the number of people engaged in online shopping, and the digitalization of economies. Market players should focus on untapped markets such as South America, and develop innovative products with advanced security to consolidate their position in the virtual payment (POS) terminals market.

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Virtual Payment (POS) Terminals Definition

  • The virtual payment (POS) terminals market report provides analysis of the global virtual payment (POS) terminals market for the period of 2017–2027, wherein, 2018 is the base year and 2019 to 2027 is the forecast period. Data for 2017 has been included as historical information.
  • Point of sale (POS) terminals are a digitalized replacement of conventional cash registers. POS terminals are widely used at various stores and retail outlets to process debit and credit card payments. The virtual POS terminal is a web-based version of a physical POS terminal. With growing Internet penetration, many online retailers use virtual POS terminals to accept debit/credit card payments through the Internet.

Virtual Payment (POS) Terminals Market in Brief

  • The global virtual payment (POS) terminals market is projected to register a CAGR of ~ 28% between 2019 and 2027. Online retailers are extensively using virtual payment (POS) terminals due to tremendous Internet penetration among the population and the increasing demand for non-cash transactions. Therefore, the virtual payment (POS) terminals market is expected to expand at a rapid pace in the coming years.
  • The global virtual payment (POS) terminals market is expected to reach ~ US$ 78 Bn by 2027 from ~ US$ 9 Bn in 2018. The growing need to adopt new IT solutions with modern consumer trends across the world is driving the demand for virtual payment (POS) terminals. This is anticipated to propel the virtual payment (POS) terminals market over the forecast period. Moreover, the increasing demand for digitalized payment systems across different industry verticals such as retail, healthcare, warehouses, and food & beverages is expected to fuel the growth of the virtual payment (POS) terminals market in the near future.
  • The virtual payment (POS) terminals market in Asia Pacific is anticipated to expand at a rapid pace during the forecast period, followed by the Middle East & Africa.
  • North America accounted for a leading market share of the global virtual payment (POS) terminals market in 2018, while the virtual payment (POS) terminals market in Asia Pacific is anticipated to attain a leading share by 2026. Growth in the retail and hospitality industry in China and India, rapid infrastructure development, rapidly expanding electronic payment industry, speedy advancements in technology, and development of the e-Commerce industry are likely to drive the virtual payment (POS) terminals market in the region.

Key Growth Drivers of the Virtual Payment (POS) Terminals Market

  • Growing trend of e-Commerce – The demand for virtual point of sale (POS) terminals is likely to increase significantly in the next few years due to a rise in consumer demand for cashless payment systems. Web-based payment software solutions help merchants boost sales by receiving orders over smartphones or through mail orders. This is propelling the growth of the virtual point of sale (POS) terminal market across the globe.
  • Integration of digital payment systems - Governments as well banking organizations are presently encouraging digital payments in order to reduce their operating costs and for better visibility of transactions. Thus, the integration of digitalized payment systems is expected to propel the demand for virtual payment (POS) terminals in the near future.

Key Challenges Faced by Virtual Payment (POS) Terminals Market Players

  • Unreliable Internet connectivity is a significant inhibitor to security issues related to online payment transactions. Virtual POS terminals are connected to different processing networks such as Wi-Fi and LAN in order to carry out transactions. Thus, unreliable Internet connectivity is retraining the growth of the virtual payment (POS) terminals market.
  • Security and privacy of confidential data is another crucial factor that is hindering the growth of the virtual payment (POS) terminals market. This is primarily because these online transactions involve extensive personal information related to users’ bank accounts.

Virtual Payment (POS) Terminals Market – Competitive Landscape

  • In February 2018, Ingenico Group introduced Axium, a next-generation Android POS platform digitalizing in-store commerce. This was designed on the open Android platform and Ingenico's Telium Tetra operating systems to converge business and payments.
  • In January 2017, NEC Corporation announced its plan to provide new exclusive point-of-sale (POS) to 8,600 7-Eleven stores across the U.S. and Canada
  • In July 2016, Cisco Systems, Inc. introduced ePOS (electronic Point of Sale), a standardized omni-channel solution for traditional retail in Germany

Some major players operating in the global virtual payment (POS) terminals market and profiled in the report include

  • Ingenico Group
  • VeriFone Systems Inc.
  • PAX Technology
  • Shenzhen Xinguodu Technology Company Ltd.
  • Fujian Newland Payment Technology Co., Ltd.
  • Panasonic Corporation
  • NCR Corporation
  • Squirrel Systems.

Companies are shifting toward product innovation and up-scaling their skills to gain a competitive advantage in the virtual payment (POS) terminals market, apart from maintaining their position in the market.

Transparency Market Research recently published a report on the virtual payment (POS) terminals market, which offers incisive insights pertaining to the market dynamics and structure. Information presented in the report gives readers an in-depth knowledge of the key happenings in the virtual payment (POS) terminals market. It helps them understand the market’s evolution throughout the forecast period of 2019 to 2027.

The study on the virtual payment (POS) terminals market analyzes various macro and microeconomic factors influencing the market’s expansion. It profiles the key players operating in the market, and provides information pertaining to their product launches and winning strategies. Information presented in the report not only enables strategic decision making but gives a futuristic view of the market. The competitive structure of the leading players in the virtual payment (POS) terminals market has also been included in the study.

The study also provides a thorough assessment of key industry trends, opportunities, drivers, and restraints in the virtual payment (POS) terminals market. It offers a brief executive summary and market snapshot to help readers understand the market’s growth. Further, it sheds light on the reimbursement scenario and regulatory scenario in the virtual payment (POS) terminals market. A regional and country-level assessment has been provided to give readers a holistic view of the virtual payment (POS) terminals market.

Virtual Payment (POS) Terminals Market: Taxonomy

The study on the virtual payment (POS) terminals market segments it into three broad categories - solution, industry, and region. Segment-wise assessment of each region has been provided to help stakeholders identify the key growth prospects. Value chain analysis and year-on-year growth projections of each segment have also been included in the virtual payment (POS) terminals market report.

Solution

Industry

Region

Software Platforms

  • Device-based
  • Web-based

Retail

North America

Professional Services

Warehouses

Europe

 

Hospitality

Asia Pacific

 

Consumer Electronics

Middle East & Africa

 

Food & Beverages

South America

 

Healthcare

 

 

Entertainment

 

 

Others

 

Key Questions Answered in the Virtual Payment (POS) Terminals Market Report

Information presented in the study answers key questions pertaining to the historical and current market trends that influence the virtual payment (POS) terminals market’s growth. Some of these questions are:

  • What will be the revenue and sales of the virtual payment (POS) terminals market in 2027?
  • Which region will be the most lucrative for the virtual payment (POS) terminals market’s growth?
  • How have current trends in the virtual payment (POS) terminals market influenced the business strategies deployed by key market players?
  • Which industry will fetch the maximum revenue benefits for the virtual payment (POS) terminals market?
  • What are the regional-level trends instrumental in the virtual payment (POS) terminals market’s growth?
  • How has the virtual payment (POS) terminals market’s growth shaped up throughout the forecast period?
  • Which software platform in the virtual payment (POS) terminals market will hold the highest share in 2027?

Virtual Payment (POS) Terminals Market: Research Methodology

TMR’s study on the virtual payment (POS) terminals market is based on comprehensive primary and secondary research. An evaluation of the current and future market scenario has been provided with the help of qualitative inputs from key market leaders. C-level executives, sales managers, company CEOs, brand managers, and regional managers have been interviewed to understand the market structure. This information is backed by exhaustive secondary research through sources such as company datasheets, press releases, research publications, case studies, and white papers. A top-down and bottom-up approach has been deployed to identify the key market players and calculate their market shares. Readers can access the virtual payment (POS) terminals market report to gain forecasted market assessment for the period of 2019 to 2027.

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